How To Stop Living Beyond Your Means In 10 Easy Steps

With so many demands on your time and income it can be hard not to be living beyond your means.

Your time is stretched so you end up spending more money to gain more time.

Your money is stretched because you’re trying to be all things to all people including yourself.

It’s so easy to live beyond your means when you’ve got access to credit cards, loans and everything else that our digital world offers us.

When you look around you see so many others spending high, enjoying themselves so why not you?

Actually, it’s OK to spend high if that is your choice as long as you can afford it and know the price you are paying.

If you earn high, you can spend high. When you earn less you need to spend less otherwise you’re living above your means and debt comes a-knocking.

Rich people stay rich by living like their broke. Broke people stay broke by living like their rich.”


Signs You’re Living Above & Beyond Your Means

Most people who have had debt have lived beyond their means at some point.

I certainly have and I know it doesn’t take much to spend too much and be wasting money.

A few extra treats here and there, some nice new clothes on a more regular basis and bam, you’ve got debt and a lifestyle you can’t afford.

And let’s be honest, you know you are living beyond your means because money isn’t sitting right with you.

You might have a niggle at the back of your mind, or your overspending is staring at you. Every. Single. Day.

So what are the warnings signs of an overspending life?

1. You worry how others perceive your spending

You worry that others will judge you for your spending choices so you continue to say yes to evenings out even though you’ve run out of money.

I get how difficult it can be to say no, it makes you feel like you are missing out.

And you can bet if others are currently overspending they won’t easily understand the idea of you trying to stop living beyond your means.

You saying no and explaining why means they have to look within and judge themselves. That’s not easy, it’s much easier to ignore their reality and keep spending.

2. You have no emergency fund

For, well, emergencies. If an unexpected bill or emergency happens your only recourse is to put it on a credit card or dive deeper into your overdraft.

Emergency spending is not running out of money 10 days before your next paycheck.

Emergencies are things like your car breaking down in the middle of nowhere, needing urgent dental treatment or losing your job. They might cost just $100, but more likely to be $1000 or more.

Very few of us can rustle up $1000 out of our paychecks, that’s why you NEED a pot of money ring fenced purely for emergencies.

You need to read this post: Emergency Fund Examples: 23 (Unexpected) Reasons Why You Need One

person looking at receipts and financial documents

3. You can’t pay off your credit cards in full every month

There’s nothing wrong with using your credit card for everyday spending as long as you pay it off in full every month. When you can’t do that you have a problem.

Credit cards are just so easy to use, whip them out, spend and job done. Until you get your credit card bill a month later and you realize you’ve spent far too money and cannot afford to pay it off.

Then the interest starts to creep up which means you can only pay a small amount of the balance off and you use the card again the next month and the credit card spiral begins.

4. You’ve got overdue bills

You’ve reached the point of robbing Peter to pay Paul, having to choose which bills are going to be paid and which are not.

The fact that you cannot pay your regular monthly bills is a big red flag that you know means you are living above your means.

5. You’re paying overdraft fees

When you get paid you’re back in the black but within a few days you’ve dipped into your overdraft and there you stay until next payday.

Looking at your account balance and knowing you are in the red and negative within a day or so of getting paid is such an awful feeling.

And the sad fact is, it makes you want to spend more because, what’s the point in trying to save when you are already overdrawn?

And that is why it is important to live within your means, that feeling of total negativity needs to be gone forever.

woman hands holding open an empty grey purse to signify living beyond your means

6. You don’t have retirement savings

You’re too busy paying for today to think about or plan for your retirement which may be many years away.

You’ve not even taken up your employers retirement match because you can’t afford it right now. But when will you be able to afford it?

Let’s put it another way, you can’t afford NOT to have retirement savings!

7. You put your holiday on your credit card

You haven’t saved for the holiday you have already booked so it’s whacked onto the credit card and you promise yourself you’ll do better next time.

But the next time comes round all too quickly and you resort to using your credit, again.

Read these posts:

How To Save For Your Dream Vacation This Year

Vacation Savings Plan, What, When And How To Save

Every time you borrow money you’re robbing your future self.”

Nathan W Morrisein
couple at a computer

How to stop living beyond your means

Recognizing the warning signs about your excess spending is the first step.

The second step is to be willing to do what is necessary to move from living above your means to below them.

Spending too much is very easy to do, spending less is a little harder. Mainly because you have created a lifestyle and habits built around your excess spending.

It’s easier to keep on doing what you’ve always done than changing things up and doing things differently.

1. Make a commitment to yourself

Make a commitment to yourself to stop living above your means and to be more mindful about your spending.

You know the overspending has to stop and you need to adjust your lifestyle to accommodate your reduced spending.

But you can still enjoy life living below your means, it’s a different way of life not a bad way of life.

You can use many different tactics to commit to less spending.

My favorites are financial goals and no spend days. Goals for my future spending and no spend days for right now.

If there is any one thing that will bring peace and contentment into the human heart and into the family, it is to live within your means.”

Heber J Grant

2. learn to budget

A budget is a crucial tool in your fight to stop living outside your means.

Your budget will help you understand exactly how much money you have coming in and how much you have in commitments going out each and every month.

Pull out your bank and credit card statements for last month.

List out all your expenses such as bills, automatic payments, vehicle and transport costs as well as other more flexible spending like groceries and entertainment that you did.

Add them all up and do not be surprised if the total is more than you earn. In fact expect this to happen. Because what you spent last month is proof that you live beyond your means.

Now you need to cut your numbers and expenses down so that the opposite happens, you spend less than you earn.

Check my post on how to budget your money for a more detailed step by step process.

woman in striped shirt putting money into a white piggy bank with money notes beside her

3. Cut monthly expenses

You’ve seen from your first budget that you can’t keep spending as you were because the numbers don’t stack up.

Go back over all your regular expenses, your bills and commitments. Which ones could you reduce or even get rid of?

  • Are you paying for a gym you seldom use?
  • Could you downsize your cell phone plan?
  • Are you paying too much on your house insurance?

One area that is ripe for reducing is your grocery spending (including eating out). There are so many variables in food costs that you can use to your advantage:

  • Go generic
  • Stop eating out
  • Shop once a week
  • Cook from scratch
  • Buy seasonally

For loads more help and advice on reducing your grocery bill join the grocery budget challenge.

4. Have saving pots

Also called sinking funds, saving pots are temporary pots of money that you save for very specific purposes.

They are for your expected expenses that don’t conveniently happen every month. Things like:

  • Vehicle insurance
  • House insurance
  • Holidays
  • Gifts
  • Home maintenance
  • Personal taxes
  • Appliance upgrades

Using sinking funds/saving pots means when you get a one off bill you have the money set aside to pay it. No need to use your credit card, you have the money saved.

5. Pause Spending

We’ve all done it, gone out for something specific and ended up buying something else, or even worse, multiple other things.

This is where using something like the 30 day rule or another spending rule helps you to break your impulse spending habit.

No-one likes to be told they can’t do something, you are much more likely to go right out and do it, just because.

Even if it is you telling yourself you can’t!

Creating a rule where you decide that anything over a set amount should have a waiting period built in before buying is a great way to reduce impulse spending.

And ultimately save money.

Because all too often we see something, decide we must have it and then a week later it lies neglected on the side.

Wait a week or longer and see if you really still want/need it.

If you do and it’s in your budget then go right ahead and buy it.

womans hands in padlock holding cash to signify how to stop living beyond your means

6. give yourself wriggle room

If you are used to spending too much and treating yourself regularly you will fail if you don’t budget for some money to continue in this vein.

I know you need to cut back and stop living above your means but having some guilt free fun money will help you do just that.

It doesn’t have to much, even $10 will make you feel a whole lot different when it comes to your budget.

When hubby and I were living on one low income, our budget was super tight, as in we couldn’t afford to have the heating on much at all.

But we still had our own fun money. That way I could buy myself a little chocolate with immediately feeling guilty!

7. Know your debt number

Part of your new budget will be debt repayments.

Find out exactly how much you owe by pulling out all your paperwork for the various debts, loans and credit cards you have and adding it all up.

Then decide how you are going to tackle your debts.

There are two main repayment methods, the snowball method and the avalanche method. Both have been proven to work, both have their pros and cons.

The snowball method is my preferred option because you feel like you are making progress quicker with it.

Whereas the avalanche method is for more logical people who can keep going even when it feels like things aren’t happening.

Use the method that works best for you as both have their own advantages.

The main thing is create that debt plan and start paying it off.

woman writing down her money goals with a pile of dollar bills beside her to signify living above your means

8. earn more money

Changing jobs to a higher paying one might not be possible but there are other ways to earn more money.

  • Asking for a raise
  • Working extra hours
  • Taking on a second job
  • Creating a money making hobby
  • Carrying out surveys
  • Earning rewards from various apps.

These can all help you raise a little extra money.

For surveys that pay out I like:

Other money making avenues you can try

1. Watch this free video workshop on how to flip and sell things for a profit

2. This free video workshop gives you the lowdown on becoming a proofreader, a great flexible work from home job.

3. Grab this list of 150+ services you can offer as a VA (working from home)

4. This free 7 lesson mini course will help you see just how easily you could become a home based transcriptionist.

5. Watch this free 9 part video course to find out how you can start a profitable Amazon FBA course

woman pulling dollar bills out of a red purse to signify living beyond your means

9. Use Cash

As far as I am concerned it’s all too easy to swipe your card and not register how much you are truly spending.

So much harder to physically hand over the cold hard cash you work so hard for.

Using the cash envelope system will help you get your spending under control and reconnect with your money.

The cash envelope system is pretty simple:

  • Identify the spending categories you usually spend in
  • Use your budget to decide how much you’ll be spending in each category
  • Draw out the exact cash you need according to your budget and place in your envelopes
  • Take your envelopes with you when you plan to spend
  • Leave your credit card at home – they’re too tempting!

10. Spend less than you earn

Sounds very simple when I put it like that doesn’t it? Just spend less.

OK, but how?

If your bi-weekly paycheck is $1200 then you need to spend less than $1200 in the following 2 weeks. Do the same for the next $1200 paycheck. Rinse and repeat.

Following all the tips above will make spending less than you earn a breeze.

“Do not spoil what you have by desiring what you do not have. Remember that what you now have was once among the things you only hoped for.”


The benefits of living within your means

I cannot stress enough the importance of living within your means. The benefits are many but for me this is what it has given me:

I have no debt and the freedom to choose what to buy and when to buy it. These are what are important to me.

I still have to budget, watch my spending and keep my expenses low because I’ve never earned anything like six figures.

But the benefits of doing these mean I sleep easy at night and don’t have to worry about debt.

If you’ve got a car on finance that is crippling you or you worry what life is going to throw at you today, then now is the time to make the lifestyle change.

To stop living beyond your means, to live instead below your means and enjoy your money.

Live within your means. Owe Nothing. Friendship and love are free.”


Come and follow me on Pinterest for more money saving hints and frugal tips!

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Last Updated on 3rd March 2021 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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